The City of London Corporation has attached eviction notices to tents outside St Paul's Cathedral, telling activists to move them from the public highways by 6pm on Thursday or face legal action.

It is the latest development in a month-long saga that has pitted the protest movement Occupy London against the corporation, the local authority for the Square Mile, and St Paul's. Both institutions own the land around the church but only the corporation is pressing ahead with court proceedings.

The notice is addressed to "each and every person taking part in and/or having erected tents or other structures at St Paul's Churchyard EC4".

It reads: "Through the erection of tents and other structures, you and others involved in the Protest Camp have taken possession and control of the Red Land from the City of London Corporation without its consent.

"The Protest Camp is therefore a trespass. It is also an unreasonable obstruction of the highway. The Protest Camp does not have planning permission and causes significant harm to the area."

Stuart Fraser, policy chairman for the corporation, told Channel 4 News on Monday he was prepared to use "all legal measures" including riot police to remove them.

"Not in a sense of going in there and causing a riot. Some may resist, some may lay on the ground and have to be carried. If they start hurling bricks, that's their decision to take violence against us. We're not going to send people in and suddenly start being violent."

Fraser, in the same interview, acknowledged there could be violence between police and protesters and that such a scenario would place the cathedral under great strain.

On Wednesday St Paul's said it had always desired a "peaceful resolution" to the situation.

"We are committed to maintaining St Paul's as a sacred space in the heart of London. We recognise the local authority's statutory right to proceed with the action it has. We have always desired a peaceful resolution and the canons will continue to hold regular meetings with representatives of the protesters."

Occupy responded to the threat of eviction by saying it was "not the least bit concerned about the road ahead".

It added: "As far as legal action goes, there is really very little to say: we are aware of our legal position and the likely timeframe for any action. We have a great legal team on board."

The protest has now entered its fifth week outside St Paul's.

The cathedral lost £120,000 in revenue during its six-day shutdown last month because of the protest camp, according to the contract caterer Habour & Jones, which runs the restaurant at St Paul's.

A press release announcing the eaterie's re-opening after a "regrettable enforced two-week closure brought about by anti-capitalist protesters and their make-shift 'tent city'" said that cancelled event bookings and lost retail revenue "hurt the restaurant and café to the tune of £10,000 in October".

Nathan Jones said: "Local businesses and the people employed within them are the ones who have suffered at the hands of these protesters, so it's important to us that we get back to a 'business as usual' service in our restaurant and café as quickly as possible. We're particularly pleased to be able to invite our customers to book their Christmas lunch in the cosy, peaceful surroundings of the Restaurant at St Paul's – a very special and popular festive experience that we were in danger of having to withdraw."

In the US, activists are marking the two-month anniversary of Occupy Wall Street on Thursday with a "national day of direct action and celebration" that will see thousands of people taking over multiple locations in New York.